A Global Business Company (GBC) is a resident company incorporated in Mauritius whereby the majority of its shareholdings are held by non-residents and which conducts business mostly outside of Mauritius. It enjoys benefits under the extensive Double Taxation Avoidance Treaties (DTAs) network of Mauritius. It is liable to pay tax at the rate of a maximum of 15% on all its income subject to the provisions of the DTAs. However, a company holding a Global Business Licence may benefit from a partial exemption of 80% which is applicable on foreign source dividends, interest, profits attributable to foreign permanent establishments, income from the leasing of aircraft and ships and the income from the provision of specified financial services as approved by the FSC, among others.
How to benefit from the partial exemption ?
The following conditions should be satisfied:
- Carry out its core income generating activities in, or from Mauritius by:
- Employing either directly or indirectly, a reasonable number of suitably qualified persons to carry out the core activities, and
- Having an indicative level of annual expenditure, which is proportionate to its level of activities;
- Be administered by a Management Company;
- Has at least 2 directors, resident in Mauritius, of sufficient calibre to exercise independence of mind and judgment
- Maintains, at all times, its principal bank account in Mauritius;
- Keeps and maintains, at all times, its accounting records, at its registered office in Mauritius;
- Prepares its statutory financial statements and causes such financial statements to be audited in Mauritius; and
- Provides for meetings of directors to include at least 2 directors from Mauritius.
A trading company engaged in international trading activities will pay a 3% tax on its profit.
The main characteristics of a Global Business Company
The main characteristics of a GBC are:
- Application for a Global Business Licence must be made through the Financial Services Commission (FSC).
- 2 Resident directors, a secretary, and a bank account in Mauritius are required.
- Audited accounts must be filed with FSC.
- Companies may claim for a partial exemption whereby tax will be payable at the effective rate of 3%.
- Where a partial exemption is not available, companies will benefit from the current foreign tax credit system (for taxes suffered on foreign source income).
- A tax residency certificate has to be obtained to make use of double tax treaties.
- No withholding tax on payment of dividends and interests.
- No capital gains tax, estate duty or inheritance tax.
- No minimum capital is required.
- Used mainly for holding investments in treaty countries.
- Substance requirements have to be met in Mauritius.
For more information and advice on its implementation please contact us.